San Francisco is a city of entrepreneurship. We have many clients who come to us in their early 20s or late 30s, who are involved in the booming tech industries of the San Francisco Bay Area. In many situations, they are compensated by stock options or other forms of investment opportunities. In fact, we also deal with angel investors and venture capitalists, who are investing in companies, looking to the distant future. In many cases, of course, people are excited to have the next big thing in technology, but realistically, many of these investments will not pay off until sometime in the future.

San Francisco Stock OptionsWe also have many high income San Francisco residents, who have very substantial retirement accounts, and these accounts are heavily invested in the stock market. Unfortunately, we do not choose the time in which we are born, and we do not choose the time in which we retire. That day in which you will be 65 is coming, whether you like it or not, and you have no way of knowing if we will have a bull market or a bear market in the stock market at that time.

The San Francisco Bay Area Crash of 2008 and Sequence Risk

Given the crash of 2008, everyone these days is aware that what goes up must come down. Sequence risk is the risk that when you are retiring the market may be a bear market. Or it’s the risk that that investment in the startup, which might be looking good, is not yet ready to be retrieved.

Our monthly San Francisco tax tips bulletin has a lively article about sequence risk but even more importantly, we do lots of consulting with Bay Area residents who are seeking to mitigate not only their taxes but also to expand their retirement income. The future will be here before you know it!